Portugal Secures €1.34 Billion for 12,000 Affordable Rental Homes in Major Housing Boost

Major Funding for Affordable Housing

A first tranche of €450 million from the total financing was signed this Thursday at the official residence of the Prime Minister.

Aiming for Below-Market Rents

The goal is to finance these homes—through construction and rehabilitation—to "create a long-term housing stock with rents below market price," as stated in a communiqué from the Ministry of Infrastructure and Housing.

Building and Renovating 12,000 Units

The €1.34 billion will be used to build and renovate 12,000 homes for affordable rental. After the financing contract was signed, Luís Montenegro presented Portugal as "a reference in terms of economic and financial stability."

The Prime Minister argued that the "lack of market confidence" has partly caused a decrease in investment in the housing sector.

Government Commitments and Market Confidence

Therefore, he assured that with this government, "the rules won't change mid-game". The Prime Minister ensured that the country has all the conditions to guarantee the timely and full application of the funds.

He also promised "a more investment-friendly tax system" to "have more supply in the market".

Program Details and Timeline

The 12,000 homes will be part of the Rental Support Program (PAA), and the credit line "will allow municipalities to implement their housing responses over a longer period—until 2030—compared to the deadline set under the Recovery and Resilience Plan (PRR) of June 2026," assured the Ministry of Infrastructure and Housing (MIH). More favorable conditions are expected, with lower interest rates and more generous grace periods, highlighted the MIH communiqué.

However, Luís Montenegro acknowledged that the fight against the housing crisis will extend for years.

Context and Delays

The signing of the financing contract with the European Investment Bank occurred after the Council of Ministers meeting. This loan had already been announced by Luís Montenegro during the closing speech of the PSD's Summer University. The signing was scheduled for September 4 but was postponed due to the tragedy at the Glória Elevator.